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GIC returns being what they are in spring 2021, it’s no wonder that investors are looking for better places to put their money.

“What are the best ETF alternatives for secure fixed income investments to replace GICs?” a reader asked recently. The answer, sadly, is that there are no alternatives in the world of exchange-traded funds for investors who fit the profile of the typical investor in guaranteed investment certificates.

GICs are all about the guarantee, which covers principal and interest combined for $100,000 at institutions that are part of Canada Deposit Insurance Corp and higher or even unlimited amounts for credit unions, depending on the province where they’re based. The price you pay for this security is a yield that tops out around 2 per cent for five years. And that’s only if you access alternative banks, not Big Six banks.

ETFs are hugely popular right now because they’re a convenient, inexpensive way to buy into an index of stocks or bonds, or an actively managed portfolio of these or other assets. Some ETFs hold deposits in bank and credit union savings accounts, which themselves are covered by deposit insurance. But the ETFs themselves are not guaranteed like a GIC.

Two other issues with high interest ETFs - they’re much better than GICs for liquidity in that you can trade them any time markets are open, but you have to pay brokerage commissions of as much as $9.99 to buy and sell. Also, the yields on these accounts right now are about 0.6 per cent. Quite a few alternative GIC issuers, all with deposit insurance, offer one-year GIC rates of 1.1 to 1.5 per cent. All can be purchased with no commissions.

There are lots of other ETFs that hold bonds, which are often lumped together with GICs as fixed income. But bonds move up and down in price according to interest cycles - rising rates this year have depressed bond prices. GICs are a zero drama investment. They sit in your account, earn interest and mature at the amount you paid.

High interest ETFs might work as a short-term alternative for cashable GICs. But, generally speaking, investors who put a lot of value on the ‘G’ in GIC will not feel at home in ETF-land.

-- Rob Carrick, personal finance columnist

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Stocks to ponder

AutoCanada Inc. (ACQ-T) Shares in this auto dealership group are trading at their highest level in six years and are up more than 700 per cent over the past year. The Edmonton-based company is expected to report a “blowout” first quarter in the coming weeks based on preliminary numbers, while continuing to make acquisitions to boost its market share. As Brenda Bouw reports, investors believe the company is well-positioned to take advantage of an anticipated post-pandemic economic rebound.

The Rundown

Rob Carrick’s 2021 ETF Buyer’s Guide: Best Balanced ETFs

Balanced ETFs have aced the first serious test of their potential to bring smart, sensible investing to investors of all types. Through the sharp stock market downs and ups of the past 12 months, these easy-to-buy funds made a strong case for chucking individual stocks and ETFs and instead buying a fully diversified ETF portfolio in a single bundle. There are now roughly 50 balanced ETFs in total. Rob Carrick’s last installment of this year’s ETF Buyer’s Guide looks at the balanced funds that have a history of at least one year and offer true balance by combining both stocks and bonds.

After blazing U.S. stock rally, some warn of tougher market ahead

Some of Wall Street’s biggest names are predicting a pause in a rally that has taken the S&P 500 to fresh records this year, leaving investors trying to determine whether to lock in some of the breathtaking gains or stay the course.

U.S. bank earnings soared, but stocks slipped. Will Canadian banks follow suit?

After large U.S. banks reported surprisingly strong first-quarter financial results last week, investors shrugged. Will quarterly results from Canadian banks next month be met with a similar reaction? David Berman goes looking for some answers.

Legalization bids boost outlook for U.S. cannabis stocks

Uncle Sam gave marijuana lovers more reason to celebrate this week as a bipartisan group of lawmakers in the House of Representatives passed a bill that would make it easier for cannabis companies to do business in states where sales are legal. Given that many pot stocks have fallen sharply over the last two months, some are seeing a buying opportunity.

Much-maligned macro hedge funds appear to be on the road to rehabilitation

For all the bad press, much-maligned hedge funds have had their best start to the year in decades, while mixed stock and bond funds flattered to deceive - and even macro hedge funds are back in vogue. Mike Dolan of Reuters reports.

Palladium shoots to new records as deficit-fuelled rally reignites

Palladium prices have surged to record levels and many analysts expect a further run towards $3,000 per ounce as automakers ramp up purchases of the metal used to neutralize harmful exhaust fumes, worsening a supply shortage. Peter Hobson of Reuters reports.

Others (for subscribers)

Bitcoin sinks below $50,000 as cryptos stumble over Biden tax plans

Friday’s analyst upgrades and downgrades

Thursday’s analyst upgrades and downgrades

Thursday’s Insider Report: A pair of stocks with million dollar trades

Friday’s Insider Report: Billionaire businessman invests $4-million in this stock that’s rallied 345% since its IPO

Number Cruncher: 15 growth-oriented TSX stocks that have lower levels of ESG risk

Number Cruncher: Twelve U.S. industrial stocks to watch as earnings season gears up

What’s up in the days ahead

David Berman will share his thoughts on what lies ahead for stock markets. Plus, Larry MacDonald takes a look at the latest predictions from one of the credit market’s best performing fund managers who steadfastly remains bullish on bonds.

V-shaped virus rebound: World market themes for the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Globe Investor Staff